Summary:
Trade around the Indian Ocean before 1500 was a largely peaceful, stable process. Empires, kingdoms, sultanates, and emirates ruled the lands around the ocean, but they did not have the naval strength or the orientation to even think of trying to control the ocean's trade. Pirates were pirates—but only attacked weak targets, and needed bases, and for the land-based kingdoms providing bases for pirates disrupted their own trade. Then came 1500, and a new entity appeared in the Indian Ocean: the Portuguese seaborne empire: [Non-Market Actors in a Market Economy: A Historical Parable): From David Abernethy (2000), The Dynamics of Global Dominance: European Overseas Empires 1415-1980 (New Haven: Yale), p. 242 ff: "Malacca... located on the Malayan side of the narrow strait... the principal

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Trade around the Indian Ocean before 1500 was a largely peaceful, stable process. Empires, kingdoms, sultanates, and emirates ruled the lands around the ocean, but they did not have the naval strength or the orientation to even think of trying to control the ocean's trade. Pirates were pirates—but only attacked weak targets, and needed bases, and for the land-based kingdoms providing bases for pirates disrupted their own trade. Then came 1500, and a new entity appeared in the Indian Ocean: the Portuguese seaborne empire: [Non-Market Actors in a Market Economy: A Historical Parable): From David Abernethy (2000), The Dynamics of Global Dominance: European Overseas Empires 1415-1980 (New Haven: Yale), p. 242 ff: "Malacca... located on the Malayan side of the narrow strait... the principal center for maritime trade among Indian Ocean emporia, the Spice Islands, and China...

...Because of monsoonal winds, vessels sailing from the Indian Ocean to China (and vice versa) had to lay over for a few months before continuing the journey. An alternative was for ships to unload their wares in Malacca, returning to their respective home ports with goods from the others' ships as well as gold, spices, and precious woods from the offshore islands. The city and strait of Malacca were extraordinarily cosmopolitan places....

The Chinese government's impact on Malacca was far more limited in scope and duration than might be expected given the country's wealth and size. Zheng He's armada of huge junks, with thousands of well-armed soldiers aboard, was designed to ensure attention and respectful deference to China's rulers from elites elsewhere.... But the admiral was unwilling to use the military might at his disposal to conquer Malacca, there being no plans to administer distant lands.... The emperor politely received the king of Malacca when the king later journeyed to Beijing, bearing tribute. But assertion of China's superior political status was made by the inferior party visiting the Celestial Court, not by the latter reaching out aggressively beyond its borders....

China's private sector had a more substantial and long-lasting impact on Malacca... the existence... of a separate section of the city reserved for Chinese merchants.... That many Chinese merchants in Malacca were long-term residents did not signify that they were overseas agents of Chinese power... they tried to avoid contact with Chinese officials rather than to work with them.... The Chinese did not carry a missionary religion to Malacca because they had none....

Arabs visited Malacca as long-distance merchants, staying in a quarter of the town set aside for Muslims.... [T]hey did bring a missionary religion.... Malacca's rulers had been Muslim for about a century before the Portuguese arrived. One may thus speak of an alliance between Arab mercantile and religious interests resembling the European pattern. But Arabs in the Indian Ocean basin were not like Europeans. First, they were not... agents of a polity eager to assert itself overseas.... Their prospects for profitable trade were most favorable if none of [the Arab city states] advanced political claims beyond its immediate domain. Traders and sailors moved on monsoonal winds from one trading center to another, intermediaries among several autonomous units rather than agents of any particular one....

The limited, functionally diffuse character of Chinese and Arab/Muslim relations with Malacca posed an insoluble dilemma for the city's sultan when he encountered Europeans.... The sultan faced toward Mecca when praying and toward Beijing when offering tribute. But for quite different reasons he could count on neither to help counter the new foe....

As Muslim merchants predicted, the Portuguese launched a triple assault on Malacca. The city was captured in 1511....

Fifteen hundred soldiers... Viceroy Afonso d'Alburquerque... permanent political control.... Construction of a stone fortress was begun as soon as the battle was won, and it was kept well supplied with soldiers and cannon. The city was a Portuguese possession until the Dutch took it in the seventeenth century... an integral part of a grand scheme to capture gains from Indian Ocean trade. Political control of enclaves throughout the ocean basin was considered a necessary as well as desirable mans to an economic end. Albuquerque appealed to the profit motive as explicitly as one could:

If we take this trade of Malacca out of [the Moors'] hands, Cairo and Mecca are entirely ruined, and to Venice will no spiceries go except that which her merchants go and buy in Portugal...

[The] religious dimension.... Albuquerque waited to launch his attack until the day of Saint James.... Non-Muslims were spared following the battle. But "of the Moors, [including] women and children, there died by the sword an infinite number, for no quarter was given to any of them."... The Portuguese were unlike the Chinese and Arabs in the number and variety of sectoral institutions at their disposal, in the stretch of these institutions far from their home base, and in the way agents of different sectors worked together....

Portugal's grand strategy in the Indian Ocean was to capture gains from a lucrative seaborne trade that had functioned for a long time. Malacca was valued as an enclave... profits literally floated past in the form of ships carrying spices, precious stones, textiles, chinaware, carvings, and so on through a narrow strait. There was no economic or strategic reason for Albuquerque to invade the Malayan interior....

Not until the nineteenth century did Europeans consider the Malayan interior worthy of their attention. Under British direction, exports from rich tin mines were increased and rubber plantations laid out... a plant Europeans had found in the New [World]... a mode of production perfected earlier in the Americas...

J. Bradford DeLong is Professor of Economics at the University of California at Berkeley and a research associate at the National Bureau of Economic Research. He was Deputy Assistant US Treasury Secretary during the Clinton Administration, where he was heavily involved in budget and trade negotiations. His role in designing the bailout of Mexico during the 1994 peso crisis placed him at the forefront of Latin America’s transformation into a region of open economies, and cemented his stature as a leading voice in economic-policy debates.